An appellate court decision affirming the class-action status for a lawsuit against Madison County has renewed officials’ debate on who should have to pay the taxpayers cheated by former county treasurer Fred Bathon.
Bathon was recently released from federal prison, having served 18 months of a 30-month sentence for rigging Madison County tax auctions at the highest interest rates to benefit the tax buyers, some of whom are still serving prison sentences. Several people who lost money or property to the scheme have filed a class-action lawsuit against the county and many others, including Bathon, in an effort to recoup their losses.
Two of three judges in the 5th District Appellate Court at Mount Vernon denied an appeal earlier this week, which returns the suit to Madison County with the county itself remaining as one of the defendants. The county had asked the appeals court to review whether the can proceed with class-action status.
Most county officials have maintained that Bathon and the tax buyers who benefited from his actions should repay the people who were harmed, not the taxpayers of Madison County. But Republican Treasurer Kurt Prenzler maintains that the county should pay for Bathon’s misdeeds, and seek compensation from Bathon and the others later.
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“It’s time for State’s Attorney Tom Gibbons and County Board Chairman Alan Dunstan to get on the right side of this issue and help the defrauded homeowners,” Prenzler said. “Gibbons and Dunstan should stop protecting the tax buyers who benefited financially and find a solution to provide restitution to the victims.”
Both Gibbons and Dunstan agreed that the people harmed by Bathon’s actions deserve compensation, but disagreed that taxpayers should foot the bill.
“Madison County officials have always agreed that the victims of Fred Bathon and his criminal co-conspirators should receive a full measure of justice, but that restitution to the victims should only come out of the pockets of the criminals — not out of the pockets of hard-working Madison County taxpayers, as Mr. Prenzler is recommending,” Gibbons said. “I can’t imagine how anyone who is fighting to protect our citizens and their hard-earned money could think that taxpayers — not the criminals — should be on the hook for damages in this case. That’s the kind of nonsense you might expect to hear in Springfield or Washington D.C., but it makes no sense here in Madison County.”
Dunstan said he believes protecting the tax buyers who defrauded the property owners is what Prenzler is doing with his statement.
“I believe the opposite — he’s the one protecting the tax buyers... They are the ones who should pay,” Dunstan said. “We want them to go after the tax buyers. Those guys deserve to lose everything they gained. To be honest, I think they should go after Fred too.... But we are supposed to protect the taxpayers’ money of Madison County.”
Prenzler said he believes the county could put together money saved by Bathon’s pension — which he lost as a result of his felony conviction — with indemnity funds and other funds to pay the people who suffered under Bathon’s actions, and then go after Bathon and the tax buyers itself.
But Gibbons said those funds cannot legally be used for this purpose. He also said the real benefits will go to attorney Don Weber, whose firm is handling the suit and who has been a long-time political ally of Prenzler.
“If we do what Mr. Prenzler is suggesting, it will result in a jackpot of attorney’s fees being paid from taxpayer money directly into the pocket of Mr. Prenzler’s chief political adviser, Don Weber. Certainly, Mr. Prenzler’s motivations should be called into question,” Gibbons said. “The inclusion of the citizens of Madison County in this class-action lawsuit is an affront to taxpayers and represents a horrible abuse of the legal system by Don Weber and his team of lawyers, and we look forward to continuing our fight to protect taxpayers from being fleeced by this class-action lawsuit.”
The only objection he has, Gibbons said, is the inclusion of the people of Madison County and the county treasurer’s office as defendants, and there will be further motions filed to get them removed from the suit, he said.
“We don’t mind a class being certified against the tax buyers who were criminal co-conspirators with Fred Bathon,” Gibbons said. “Go get the money from those people, because there is money to get.”
Bathon’s bid-rigging scheme, under which he conspired with prominent tax buyers to rig property tax auctions in return for campaign contributions, forced 10,000 Madison County property owners into paying excessive interest rates and penalties from 2005 to 2009 on their delinquent taxes. Bathon pleaded guilty in January 2014 to a federal bid-rigging charge and was sentenced to 30 months in prison, of which he served 18 months.
Tax buyers John Vassen, Scott McLean and Barrett Rochman are serving prison terms of between 16 months and two years at a minimum security federal prison camp. The guilty pleas, and three lawsuits filed in the case as well as a federal investigation, occurred more than three years after a September 2010 series by the News-Democrat exposed Bathon’s scheme.
The three lawsuits were consolidated into one class-action lawsuit by Clinton County Judge William Becker, who was brought in to Madison County to rule on the case as a neutral party.
Contact reporter Elizabeth Donald at email@example.com or 618-239-2507.